Donor retention rate is a crucial metric for nonprofits that shows the percentage of donors who stay engaged with your cause after the first year. Keeping your existing donors is key as retaining them is much cheaper than acquiring new donors.
It’s essential for nonprofits to understand the basics of donor retention, how to calculate it, and actionable pointers to increase your donor retention. Together, this knowledge will form the basis of a successful nonprofit strategy with recurring donors at the heart of its ongoing success.
Donor Retention Explained
Donor retention is a metric that gauges the percentage of donors who continue to make donations to your organization after their first donation. In other words, a high donor retention rate indicates that you keep your donors interested in your cause year after year.
Conversely, a nonprofit with a low donor retention rate (or high churn rate) doesn’t keep its new donors engaged after the first donation. The consequence of this is that they must work relentlessly to continually attract new donors to keep their cause going.
Retaining donors is key to long-term nonprofit success, as keeping repeat donors is much more cost-effective than a constant focus on new donor acquisition. However, keeping existing donors engaged requires a concerted effort on the part of the nonprofit.
The Role of a CRM in Retaining Donors
The days of manually tracking existing and prospective donors are long gone for the most successful nonprofits, with many relying on their CRM’s capabilities to streamline their donor retention efforts. Platforms like ascend CRM by Kindsight have revolutionized how nonprofits handle their donors by providing tools to leverage data-driven insights and focus messaging to keep them engaged.
The best nonprofit CRMs provide capabilities that keep your donors interested while your staff focus on human-facing roles that boost your presence in the community. The following features are key to staying ahead of the curve in 2025:
- A central database that offers a comprehensive view of your donors and operations
- Tools to segment donors seamlessly, personalize communications, automate responses, and leverage advanced analytics to optimize fundraising campaigns
- Customizable features that mold to your nonprofit’s needs
- Advanced prospect management tools that provide recommended actions based on their activity, preferences, and propensity to give.
Fundraising in 2025 and beyond is all about leveraging data to increase your engagement and keep your donors on side. An AI-powered CRM is the best way to stand out, meet donor expectations, and reach your campaign goals by reducing churn. But just as important is having the right IT support for nonprofits to ensure your systems run smoothly, your donor data stays secure, and your tech tools actually work for your mission.
How to Calculate Donor Retention Rate
Calculate your donor retention rate as a percentage using this formula:
(Repeat donors in year 2 / total number of donors in year 1) x 100 = donor retention rate
Example:
If your nonprofit was supported by 1,000 supporters in 2023 and 500 of them donated again in 2024, the formula would show a 50% donor retention rate:
(500 / 1000) x 100 = 50%
How to Interpret Donor Retention Rates
Donor retention rates tend to vary according to the types of causes nonprofits serve. The most helpful way to assess your donor retention rate is to compare your rate to other nonprofits in your sector. This will help you understand where your organization stands relative to your competitors.
The next step will be to dig into the motivations behind donors’ decisions to make repeat donations or not. Detailed analysis of the data will help you work out who you’re retaining and churning and why. The conclusions you come to during your analysis will form the basis for your donor retention strategy going forward. Improving on your shortfalls as an organization will help you target your campaigns toward repeat donors and build the most cost-effective strategy.
How to Increase Donor Retention
Raising the number of donors who continue to contribute to your cause is in your control. A change in strategy will help you improve the factors that impact donors’ decisions to keep donating. Some best practices to improve donor retention rates include:
Clear, Personalized Communication
Communication that informs donors of the impact of the programs and services they help fund is a key driving force behind donor engagement with nonprofit organizations. 2022 focus group research into donor participation in the U.S. revealed that donors want to be informed of their donations’ impact in more engaging and personal ways. This even translated to shifting their loyalty to organizations that demonstrate the most impact and efficacy and personalize their donor communications.
Nonprofits can personalize their messaging following a number of strategies. The most efficient way is to use software like engage, which leverages rich insights to personalize and tailor all your donor communications.
Calling is also a great way to foster lasting donor relationships, especially with major donors. Use the information you have on your donor database to speak to them personally while letting them know about upcoming events or updates on your campaigns. These are great gestures with a personal touch.
Make Your Donors Feel Special
You can increase how many donors continue contributing to your cause with basic gestures like thanking them for their support. Naturally, people want to be recognized for making contributions or it can feel like their donations are taken for granted. Thanking donors personally for their generosity is a key part of effective donor stewardship that must be integrated into your wider fundraising effectiveness project.
There are many other ways to make your donors feel seen and appreciated. Consider sending them gifts, a handwritten note, or acknowledging them publicly on your social media platforms. The key here is understanding your donors and what resonates with them. Leverage all the data you have on them to decide what will stand out to them as a great donor experience.
Optimize Recurring Donation Systems
Donor churn sometimes occurs due to simple clerical reasons like an expired card on file. Having systems in place to catch this kind of event before it occurs is a key donor retention measure that will help you reduce preventable churn.
Gather Data and Feedback
There’s much talk in the business world around “customer success” and how to achieve it. The idea behind customer—or donor—success is putting proactive strategies in place to understand the customer experience. Nonprofits can also apply this concept to their donors.
Delving into the donor experience will uncover actionable insights you can use to improve donor satisfaction. Reaching out for feedback also shows you care about your donors and are willing to listen and take on feedback.
You should also use all the insights your donor database offers to shape your strategies. Analyze data like your donors’ affinities, connections, preferences, and propensity to donate to get the best idea of what motivates your donors and how to use that information to tap into more fundraising revenue.
Personalize Your Donor Follow-Up
A key concept in successful donor retention is recognizing that every donor is different. Each donor connects with your cause in a different way, has distinct levels and ways of contributing, and is motivated by varying factors. The way you engage donors will have an impact when experiencing donor attrition.
Donors will appreciate personalized messaging that adds a human touch. Your donor management software should be capable of segmenting donors into groups. This allows you to craft your communications according to individuals’ tastes and preferences and keep things relevant to your donor.
However, doing this manually is an arduous and labor-intensive task. That’s why many nonprofits are turning to generative AI communication tools to create the first drafts of their communications.
Different ways to segment your donors include:
- Donation amount: This allows you to prioritize major recurring donors while tailoring messaging to your other smaller donors.
- Event attendance: Keeping donors engaged in your fundraising efforts is a great way to retain them as donors. Follow up with individuals who show interest in events to keep them on board.
- Donation frequency: Your system should flag any sudden changes in donation frequency. Follow up with the donor to pinpoint the reasons behind the change.
Shape Your Strategy Around Recurring Donors
Cultivating lasting relationships with your donors requires a strategic and multifaceted approach. Prioritizing personalized communication, demonstrating tangible impact, fostering meaningful engagement opportunities, and leveraging data-driven insights enables your nonprofit to significantly strengthen donor loyalty.
Remember that donor retention is not merely about securing repeat contributions; it’s about building a community of committed supporters who feel valued, informed, and deeply connected to your mission. Implementing these strategies will allow your organization to look forward to a more sustainable and impactful future in the years to come.
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